How retailers are using technology to remain relevant
From the constant innovation at Asos, Amazon and Missguided to the new supply chain prowess flaunted by Diesel and Gap, fashion retailers are investing in tech to stay relevant to their customers
London Fashion Week (LFW) has once again given retailers and technology companies an opportunity to discuss and showcase the innovation in their sectors.
Just what will become a permanent fixture in the retail landscape and what will fade into darkness after the lights go out on the glitzy runway shows remains to be seen.
Japanese e-commerce company Rakuten launched Fit Match through subsidary Rakuten Fits Me on the eve of LFW. Fit Match promises to help online shoppers aggregate clothes that fit their unique body profile.
Taking the form of a search engine add-on, Fit Match allows participating retailers to provide their customers with a range of available items based on their age, height and weight.
Using an algorithm that combines garment categorisation, attribute mapping, data science and historical shopper information, the system has been designed to solve the long-running consumer issue of finding the most suitable fit when buying items online.
This is just one example of the new tools that came to prominence during LFW 2017, and Burberry chief creative officer Christopher Bailey spoke broadly in the build-up to the event about the potential of using tech to speed up direct-from-catwalk orders.
Burberry is one of a multitude of brands to have experimented with using social media to facilitate instant purchases of some lines showcased at LFW events, but it was Amazon that stole the headlines in this area during a time traditionally associated with luxury.
Amazon, which is in the early stages of selling its own-brand fashion items, tested out rapid delivery of a new range from designer Nicola Formichetti – effectively offering a 60-minute catwalk-to-home service.
Items ordered through Amazon’s Prime Now membership service were available for one-hour delivery in London, while customers across Europe can order by Prime for one-day delivery.
It was a clear fashion sector statement of intent from Amazon, but the jury is still out on the market potential for the e-tailer’s own-label, Find, which launched its first national ad campaign at the start of September.
James Clark, senior lecturer at London College of Fashion (LCF), says: “I buy from Amazon because it has a wide inventory and it’s a simple case of clicking and waiting for it to arrive.
“Going down the own-label route is redefining what [Amazon] is because it is no longer just looking at service and convenience – it’s also got to build up a relationship with the consumer, who has to buy into something.
“It’s almost no different to George, Tu and F&F at the major UK supermarkets, in that there’s no reason to buy the product itself other than convenience. Looking at the product, there’s very little that’s compelling about it – there’s not yet a case for ‘I must buy Amazon trousers’, but [Amazon] could disrupt the fashion market if this works.”
Fashion innovation away from the cameras
At the Oracle Retail Industry Forum in Barcelona, which coincided with LFW, fashion retailers discussed how they have used technology in their supply chains.
Diesel recently introduced an end-to-end lifecycle planning system from Oracle that provides an analytics-driven approach to assortment planning and managing stock flow through a product’s lifecycle.
Aside from Diesel’s outlet stores, the capability has been implemented across all geographies and divisions. It links up head office with each region to ensure smoother processes, such as store-to-store transfers during annual sales periods and better optimised stock levels per store.
Gap is also working with Oracle to standardise its merchandising processes, developing and introducing a new core system in just under six months to help create common merchandising techniques for its Intermix brand.
Online fashion house Asos claims to be the first retailer to use clearance optimisation technology from Oracle in the cloud. Asos is in the midst of using the technology across its entire business for the first time as part of its mid-season sales period.
Chris Metcalf, merchandise planning tech programme manager at Asos, says: “On a basic level it’s a calculation engine that ingests wide amounts of data history to produce a table of markdowns and forecasting curves.
“If you’ve got the initial sales history and the sale curves, you can then generate a natural demand curve by adding pricing factors. Once you have those curves you overlay them with your specific business rules, which give a set of guidelines and boundaries for the system to work.”
We like to see ourselves as innovators in tech, and we’re always after the next big thing in online shopping
Lucy Partridge, Asos
Lucy Partridge, retail subject matter expert at Asos, says the initial success of the project can be attributed to the fact senior merchandising team bought into the technology and helped educate the workforce about the system’s significant potential.
“We are a fashion company but we’re also a tech company,” says Partridge. “We like to see ourselves as innovators in tech, and we’re always after the next big thing in online shopping. We are early adopters of technology.”
A key benefit identified by Asos is the reduction in manual merchandising required during sales season, which Partridge says is particularly useful for a company that sells 85,000 different products.
The integrated analytics-based system marks a shift away from merchandisers using Microsoft Excel to set pricing. It also comes ahead of a wider 2018 roll-out of the complete Oracle tech stack as part of Asos’s digital transformation plans.
Jeff Warren, vice-president of solution management at Oracle Retail, says the very nature of the fast-changing, trend-driven fashion world means the sector is primed to lead much of the technological innovation in retail.
“Fashion absolutely leads the way and is at the forefront of virtual reality, showrooming, augmented reality and 3D printing,” he explains.
“It’s an industry that has to reinvent itself every season, and that lends itself to being very accessible and open to leveraging and trying technology as part of the re-launch of the brand and as part of every new line.”
What can new fashion teach the old guard?
As established fashion players battle with the challenges of serving the modern shopper, digital native retailers continue to bend the rules of traditional retail with seemingly intuitive tech-led propositions.
Ex-pureplay Missguided has started to roll out its own stores, with one at London’s Westfield Stratford City and another at Bluewater in Kent – and they have been designed with a digital shopper in mind.
As well as acknowledging the strong social aspect of the brand, with customer Instagram quotes splashed around their interiors, the stores are among the first in the UK to offer the Powered by Doddle click-and-collect service.
The system includes an array of software, training, communications and analytics modules, which aim to improve the customer experience and help the retailer build incremental value from click and collect.
Doddle’s software allows Missguided to handle receipt and storage of goods, event-driven customer communications and expired parcels on one platform, and the retailer can access the system from a mobile tablet device when serving customers in a store.
Meanwhile, Amazon’s entry into fashion – with more than 15 Amazon Fashion brands now operating in the market – has the potential to further shake up the sector.
Commenting at the time of the recent Find campaign launch, the brand’s director Glen George said Amazon was “focused on delivering exciting new items every week” to quench consumer thirst for the hunt and discovery process involved in fashion shopping.
Fashion can take a long time to master and Amazon is only at the beginning of its brand journey, but as ever the company will be confident in the strength of its product fulfilment and convenient customer service offering. For example, customers have the option of free returns and unlimited one-day delivery for Amazon Prime members.
It is estimated that Amazon will become the US’s largest apparel seller in 2017, and this is being fuelled by the likes of big brand names such as Nike recently signing deals to sell items directly to consumers through the marketplace.
Amazon Fashion has also announced its Prime Wardrobe service, which will allow consumers to try online orders before they buy them. Shoppers can order and receive three or more clothing items, and then have seven days to make a purchasing decision – they are only charged if they opt to keep items, otherwise they can return them for no cost.
It is a method to reduce long-term returns, but it could also increase the number of items entering a shopper’s basket in the first instance. Many services Amazon trials are later replicated in the wider retail sector, and this new proposition could follow suit – especially when the costly returns process affects so many companies.
Next generation fashion
London College of Fashion’s Clark, who is effectively helping shape the fashion sector of the future by running industry-related courses at LCF, says there is plenty of focus on how technology is affecting today’s fashion market in the university.
“We are focusing on looking at the influence of technology and artificial intelligence and technologically enabled supply chain processes,” he says.
“In terms of tech to support processes and supply chain, there is a lot of work going on to connect different elements of the supply chain to get one version of the truth with a single point of entry.
“If all stakeholders are linked up through the product lifecycle by one system, then everyone can build value from the beginning all the way through to the end with an integrated system approach,” he adds.
That type of tech focus in retail is nothing new, with many organisations addressing these particular challenges, but the fact the fashion industry’s next generation is adopting this approach arguably bodes well for the future of the sector.
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